I don't expect this situation will crop up too terribly often, but what exactly is the rule for re-Binding a demon whose master has died?

In the "Training Run" section, on p.84 of the core book, it mentions such a re-Binding, but it doesn't specify how it's done.

In the "Binding Subtleties" section on p.93, it mentions that a dead master probably won't be meeting the demon's Need, leaving it free to break the Binding pretty darn easily, if it's been in Need for enough time. The later rules for rebellion seem to imply that only the demon can break a Binding -- a sorcerer can't cause it to happen.

So, from this, I'm extrapolating that, if a demon has not broken the Bond with its dead master, and you want to re-Bind it, you have to convince it to break the initial Binding first, then you can Bind it as normal. Is this correct?

That's absolutely right! Think of Binding to a particular person as a self-driven, committed status for the demon, even if the presentation/color of Binding made it look like the demon was objecting or resisting. Once achieved, they have to lose (break) that status themselves. The situation of the Binder (killed, long-dead, living in Bangkok, whatever) doesn't matter, except regarding the issue of the Need.

Typically, if a demon is still Bound to a long-dead master, it may well have been Contained, which protects it from the ravages of Need.

This idea can surprise people who didn't read too carefully and assume that Binding a demon protects you from it ...

Now that I think about it, though, I think this situation really might crop up pretty often. We're (my group) talking about doing Sorcerer in a vaguely Elizabethan era, and I'm finding it easy to visualize old, broken-down sorcerers who are easy to kill when separated from their demons, and old demons summoned by long-dead sorcerers, now locked up in undercrofts and towers.

(We're talking about doing four kinds of sorcerers, with four corresponding kinds of demons, that really vary only in terms of color but are still pretty neat. Diabolists, who deal with devils from Hell; witches, who traffic with spirits of nature, including but not limited to elves and trolls and such; fringe alchemists who construct artificial life like homunculi and chimerae; and necromancers, who conjure the spirits of the dead. We got the idea from a video game, of all things, called Grim Grimoire, which I found to be a delightful game in all respects. I'm excited about it.)